That Dr. Strange movie had a lot of problems. Throwing Wanda's character and story under the bus is just a symptom of much more fundamental issues.
I got what they were supposed to be. The part that confused me is why anyone thought a bunch of stuffy werido snobs with major 'Eyes Wide Shut' vibes (yes I know that movie came much later) was even slightly interesting (or appropriate!) for this kind of franchise. I remember watching those episodes as a kid and being thoroughly bored just looking at them.
As for Sinister; he had a memorable design, I'll give him that, but very one-note next to the likes of Magneto.
They were Chris Claremont trying to see how far he could get away with his fetishes in the books.
Mr Sinister suffered from Claremont dragging his feet and not explaining his true plans for the character before he left and not telling anyone else, so later writers gave him an origin that was in no way what his creator planned.
Originally Mr Sinister was going to be revealed to be a robot/artificial lifeform being controlled by the "real" Mr Sinister, a mutant whose power was immense intelligence and immortality...but the side effect was that he was stuck at the form he was in when his mutation activated. A 10 year old boy.
That's why Mr Sinister had a silly name and an over-the-top design, he was literally meant to be the creation of what a kid would think a cool supervillain would look like.
Of course, even this original idea for Mr Sinister made little sense because Claremont never bothered explaining why this immortal kid mutant would choose to be evil to begin with.